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Flipkart presentation (EoS).pptx - FLIPKART STRATEGY AND...

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FLIPKART STRATEGY AND PERFORMANCE AGAINST ECONOMIC MODEL ON MARKET STRUCTURE AND COMPETITIVE RIVALRY
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ABOUT FLIPKART E-commerce firm started on Sept 2007, by two IIT Delhi graduates (ex-Amazon India’s staff) named Sachin Bansal and Binny Bansal. Company registered in Singapore, with their headquarters in Bangalore. Started with selling books online, now their products range from electronic goods, e-books, stationery supplies, fashion, life style products etc. Flipkart, which also owns online fashion retailers Myntra and Jabong and payments app PhonePe, controls 40-45% of the e-commerce market. With an initial investment of USD $6000, Flipkart touched good sold or gross merchandise value (GVM) of $1 billion in march 2014. Venture capitals and private investments fuelled the growth of flipkart helping it to be one of the biggest e-commerce players in the Indian market. Current valuation is in the range of $ 11-12 billion, where Japan’s Softbank being largest shareholder (23.62%), Tiger Global second largest (20.5%) and Naspers (MIH B2C Holdings BV) third largest with (14.57%). US retail giant Wal-Mart planning to acquire a substantial stake which might double the valuation to $20billion.
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REASON TO CHOOSE FLIPKART Flipkart’s strategic leadership positioning in the online retail industry despite Amazon's deep pockets and ads. (Any Cost advantage?). How in a short span (<11 years), company grew to a billion dollar firm. Strategy of Flipchart's valuation model with private equity investments rather than focusing on bottle-line. (sustaining competitive advantage ?)
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INDUSTRY ANALYSIS Bargaining power of supplier: low Many manufactures/producers for any given product category. Operational and logistic constrains to start online sales for each manufacturer. Online retail – hot medium of sales compared to offline stores. Bargaining power of buyers: high Numerous online websites. Low mobility barrier for customers. Elastic nature of market. Price - only differentiator. Threat of new entrants: high Government regulations on FDI Asset light capital structure industry Exponential growth forecasted in online sales. (Report by Morgan Stanley, India’s ecommerce market is expected to grow to $200 Bn by 2026) Threat of substitutes: low Primary substitute – offline stores, which requires customers time, exertion and cash.
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